buying and selling websites
TRANSCRIPT
Questions to Ask Yourself Why buy and sell websites? How much is my time worth? Do I want a Job or an Investment? What kind of return on my capital investment do I
need? What size deal makes sense? What kind of risks does the site have? What are my plans for this site?
Why Buy or Sell Websites Know your reasons for buying:
Cash flow Asset appreciation Synergy Untapped potential Private Blog Network
Why Buy or Sell Websites Know your reasons for selling:
Cash out Redeploy capital Declining market Focus on core business Bored
How Much is Your Time Worth$100k a year / (52 weeks x 40 hours) ≈ $50 per hour.
Don't work for less than you are worth:Website Monthly Income = $1,000Hours Required Per Week = 10 $1000 / (4 weeks x 10 hours ) = $25 per hour
Website Monthly Income = $10,000Hours Required Per Week = 10$10,000 / (4 weeks x 10 hours ) = $250 per hour
Do You Want a Job or an InvestmentSite For Sale : $3000 a month pure profit.
Would you buy this site for a 6 month multiple @ $18,000?
What are the real costs in terms of time?
How much are you worth = $50 per hour$50 per hour x (4 weeks x 40 hours ) = $8,000 of your time$3000 / (4 weeks x 40 hours ) = $18.75 per hour
Hours Required Per Week = 40
What Kind of ROI Do You Want Typical investment:
CD Rates 1% Bonds 2-6% Stock market 7-12% Real estate 5-14%
Why do these investments pay different rates of return?
What kind of return do you want?
What Size Deal Makes Sense
$50 x 40 hours x 12 months = $24k per year.
$50 x 40 hours x 12 months = $24k per year.Total return needed on $500k investment would be $149k or a 29.8% time and risk adjusted return.
The larger the deal, the less your time requirements impact the return.
$100k x 25% = $25k per year
$500k x 25% = $125k per year
Total return needed on $100k investment would be $49k or a 49% time and risk adjusted return.`
Is The Investment Worth The Risk
How much competition is there? What are the barriers to entry? Are there one or more critical employees? Does the business rely on an outside source? Does the business exploit something? What kind of SEO has been done? Are there pending changes to the law? Is the business seasonal?
Is The Investment Worth The Risk• What is the traffic mix?
Organic traffic Paid traffic Social traffic Direct traffic Referral Affiliate
Due Diligence Tools (F/P) - SpyFu.com (F/P) - Moz.com & Moz.com/researchtools/ose (F/P) - SEMRush.com (F/P) - Majestic.com (F) - BannedCheck.com (F) - SeoMastering.com (F) - YouGetSignal.com (F/P) - DomainTools.com (F/P) - CopyScape.com (F) - Alexa.com (F/P) - Compete.com
F = Free P = Paid
Due Diligence Tools (F) – Archive.org (F) – BuiltWith.com (F/P) – Topsy.com (F) – TradeMarkia.com (F) – SocialMention.com (F) – Google Trends (F/P) – WhoRush.com (F/P) – ReverseInternet.com (F) – SpyonWeb.com (F/P) – KeyWordSpy.com
F = Free P = Paid
Due Diligence Tools
Has the site been affected by Google updates?
Due Diligence Tools How long has the site been ranking?
Additional Due Diligence Read the comments of other prospective buyers Research the seller not just the company Ask questions that you have already researched and know the
answers to Ask seller to add you to their Google Analytics account Ask questions about potential revenue streams Ask what plans the seller had for the business moving forward Ask seller to verify all claims with documentation Ask about anomalies Ask about skills and time required to operate the site Ask, Ask, Ask!!! Does everything add up?
What Are Your Plans For The Site Create a detailed plan and time line before closing on a deal
Migration Backup website Transfer domain Update income sources Take/transfer accounts Transfer website
Operation Who, what, when
Expansion / Optimization Who, what, when
How to Transfer the Site Communication is Key
Agree on specific terms and a transition plan before you agree to purchase the site.
What is your pain point? High value vs. low value sites
Prepare a contract detailing the terms of sale: Time frame and consequences for transfer Payment Terms Seller Support Non-Compete Non-Disclosure Non-Performance
Contracts With Key Employees
How to Pay For a SiteSend Payment First:
• Escrow.com
• Paypal.com
After Transfer of Domain and Files in Hand:
**Warning these methods have little to no recourse!
• Check
• Cash
• Wire Transfer
• Western Union
Where To Buy and Sell WebsitesAuctions - Flippa.com - Ebay.com
Broker - QuietLightBrokerage.com - DigitalExits.com - FEInternational.com
- WeSellYourSite.com - AcquisitionsDirect.com - WebsiteProperties.com - W3BusinessAdvisors.com - WebsiteBroker.com
Where To Buy and Sell Websites
Market Place - BuyingandSellingWebSites.com - BizBuySell.com
Miscellaneous - RhodiumWeekend.com–Internet Investment Summit
- Master Mind Groups - Networking
- Contact Site Owners- Craigslist- Forums
Pick The Right BrokerAsking Price of Site $23,000 Excerpts from a conversation with a broker
I ask for a P&L and clarification on numbers that were provided but were incomplete.
Broker - "This is a bargain basement sale. Not a $600,000 acquisition. So unfortunately that means we have more potential buyers and less available time to entertain such in-depth questions which certainly do feel like competitive research vs due diligence." … " this is a quick sale and we have others interested. Currently you don't have an offer on the table but you have questions which, I'd argue, are irrelevant to what the asset package / sale is. So it's just a matter of balancing the time and needs of the clients and other prospective buyers."
